Labor market competitiveness and the size of the informal sector

This paper formalizes the dynamics of the informal sector with a special emphasis on the levels of labor market competitiveness in the formal and informal sectors. Specifically, it analyzes the effects of improved productivity and higher entry costs into the formal sector on the size of the informal sector for different degrees of competitiveness in the labor markets. We show that when the informal labor market is competitive while the formal labor market is not, lower production technology in the formal sector or a higher entry cost reduces the size of the informal sector in the long run.     

Interdependency among addictive behaviours and time/risk preferences: Discrete choice model analysis of smoking, drinking, and gambling

This paper simultaneously measures the rate of time preference and the coefficient of risk aversion, as well as investigates the interdependencies of four addictive behaviours: smoking, drinking, pachinko (a popular Japanese form of pinball gambling), and horse betting among a sample of the Japanese population. We reach two main conclusions. First, there are significant interdependencies among the four addictive behaviours, in particular between smoking and drinking and between gambling on pachinko and the horses. Second, we conclude that the higher the time preference rate and the lower the risk aversion coefficient becomes, the more likely individuals smoke, drink frequently, and gamble on pachinko and the horses.     

Relative Curvature Measure for Heteroscedastic or Non Normal Nonlinear Regression

The Bates–Watts relative curvature measure can assess the validity of the linearized approximation in nonlinear regression models. However, it is developed based on an ordinary nonlinear regression in which the observation is assumed to be homoscedastically and normally distributed. In this article, we extend the original Bates–Watts relative curvature measure to one that can be applicable to nonlinear regression with heteroscedastic or non normal data, based on the transformation-both-sides (TBS) approach. In pharmacokinetic models, a diagnostic use of their measures is illustrated. By means of a simulation experiment, the performance of the relative curvature measure for the TBS approach is evaluated.     

Social norms, inequality and child labor

This paper theoretically analyzes a situation wherein adults’ decisions on child labor are affected not only by materialistic utility but also by a social norm against child labor. The adult thus faces a tradeoff; on the one hand, household income rises if she sends her child to work. On the other hand, the adult suffers disutility from violating the social norm in so doing. We also suppose that the extent of disutility falls as more other adults have their children work. We then explore how the total amount of child labor in an economy changes as adults’ labor efficiencies rise or become more unequal. Our analysis reveals that a more equal distribution or rises in adults’ labor efficiency help decrease child labor only under certain conditions.     

Returns to scale vs. damages to scale in data envelopment analysis: An impact of U.S. clean air act on coal-fired power plants

This study proposes a use of Data Envelopment Analysis (DEA) to measure Returns to Scale (RTS) of US coal-fired power plants. The power plants produce not only desirable outputs (e.g., electricity) but also undesirable outputs (e.g., CO₂ and NO_x) as a result of their plant operations. Therefore, the proposed use of DEA also measures a new concept, or “DTS: Damages to Scale” (corresponding to RTS for undesirable outputs). Both scale measures discussed in this study are a quick-and-easy approach for assessing RTS and DTS, but not an exact method, because it does not consider a direct linkage between the two measures. This study applies the proposed approach to examine the legal validity of U.S. Clean Air Act (CAA). We find that the CAA has been legally effective and influential on the operation of coal-fired power plants in the United States because their plant operations belong to increasing RTS on a desirable output and increasing DTS on three undesirable outputs. The increasing DTS indicates a need for managerial improvement and/or engineering innovation such as advanced clean coal technology. This empirical result implies that U.S. federal and state governments need to expand the legal scope of CAA to the emission control of CO₂ because the current CAA excludes the regulation on CO₂ emission that is now considered as a main source of the global warming and climate change.     

Interannual fluctuations in recruitment and growth of the sardine,Sardinops melanostictus, in the sea of Japan and adjacent waters

Recruitment and growth of the sardineSardinops melanostictus fluctuated markedly in the Sea of Japan and adjacent waters between 1978 and 1993. Stock size was calculated using Virtual Population Analysis and average body length in each age class was determined by the number of annual rings on the scales. There is an inverse correlation between average water temperature at a depth of 50 m in the coastal area of the mainland of Japan in winter (January to March) and recruitmentR defined as the number of individuals at 1 year old. There is also an inverse correlation between spawning stock sizeE and reproductive success in (R/E). A multiple regression model using spawning stock size and water temperature in winter as independent variables can explain 73% of variance in reproductive success. It suggests that both density-dependent and density-independent factors perform important roles determining reproductive success. There is an inverse correlation between body length and stock size and this suggests that there is a density-dependent effect on the growth of the sardine.     

Geographical accessibility to gambling venues and pathological gambling: an econometric analysis of pachinko parlours in Japan

The relationship between geographical accessibility to gambling venues and the prevalence of pathological gambling is still unknown. This study aimed to reveal this relationship in Japan as well as its variation by subpopulation. A cross-sectional study was conducted, based on an original web-based survey to understand the level of pathological gambling depending on accessibility to pachinko parlours. Pathological gamblers were measured using the Japanese version of the South Oaks Gambling Screen. Accessibility to gambling venues was defined as the number of pachinko parlours within a 1.5 km radius from home. Moreover, the study adopted the instrumental variable approach to solve the potential endogeneity problem. The results showed that the accessibility was not significantly associated with pathological gambling in general, but that the effects of accessibility varied by subpopulation. Accessibility was significantly and positively correlated with pathological gambling for men and people in low-income areas, but this was not so for women and people in high-income areas. The study’s findings show the importance of the neighbourhood environment and could help in implementing more effective interventions for pathological gamblers.     

The Mean Squared Error Optimum Design Criterion for Parameter Estimation in Nonlinear Regression Models

In the context of nonlinear regression models, we propose an optimal experimental design criterion for estimating the parameters that account for the intrinsic and parameter-effects nonlinearity. The optimal design criterion proposed in this article minimizes the determinant of the mean squared error matrix of the parameter estimator that is quadratically approximated using the curvature array. The design criterion reduces to the D-optimal design criterion if there are no intrinsic and parameter-effects nonlinearity in the model, and depends on the scale parameter estimator and on the reparameterization used. Some examples, using a well known nonlinear kinetics model, demonstrate the application of the proposed criterion to nonsequential design of experiments as compared with the D-optimal criterion.